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The  Trust  Question 
Answered 

and 

American  Panics 

TWO  LECTURES 


By  Howard  H.  Caldwell 


Price  10  Cents 


COPYRIGHTED  1912 
By  the  Author 


PUBLISHED  BY 

H.  H.  CALDWELL 

2162  Thirty-eighth  Ave.,  Oakland,  Cal, 

15 


''T'-f.-X^ 


HOWARD  H.  CALDWELL 

LECTURER 


Author  of  "Our  Mental  Enslavement,"  "Warl"  etc. 


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The  Trust  Question  Answered 


CHAPTER  I. 

POPULAR  MISCONCEPTION  OF  THE  TRUSTS 
THE  SMALL  CAPITALIST  CLASS 

^  During  the  past  twenty  years,  since  consolidation  in 

^  industry  has  been  so  rapid,  the  newspapers  of  the 
•-  smaller  capitalist  class  and  their  political  mouthpieces 
have  voiced  a  demand  for  the  destruction  of  the 
O  *Trusts,"  and  the  return  to  the  days  of  small  pro- 
^       ductior 

<  Mr.  Bryan,  Mr.  Hearst,  and  many  other  politicians 

representing  this  class  politically,  have  denounced  these 
^  organizations  of  capital  as  criminal  conspiracies,  and 
^  have  endeavored,  like  Mrs.  Partington,  to  sweep  back 
(J)        the  sea  of  evolution  with  a  broom. 

They  desire  to  return  to  the  days  of  small  production, 
O'  and  "free  competition,"  They  style  themselves  "pro- 
C  gressive,"  but  are  in  reality  standing  for  the  most  re- 
^  actionary  position  in  American  politics  today.  They  de- 
^  sire  to  turn  back  the  hands  of  time  fifty  years,  to  a 
?2  period  passed  by  us  in  our  evolution,  and  to  which  it  is 
*~         impossible  to  return. 

It  was  a  time  of  the  greatest  prosperity  for  their 
class,  during  which  time  they  had  sufficient  economic 
strength  to  control  our  political  government,  mold  our 
law  and  morals  to  conform  to  the  slightest  desires  of 
their  class. 

They  believe  this  retrogression  is  possible,  but  we 
find  no  precedent  for  it  in  history.  It  would  be  as 
sensible  to  advocate  the  destruction  of  the  railroads 
and  the  return  to  the.  stage  coach. 

By  means  of  organization  and  system  in  our  indus- 
trial methods  we  have  increased  our  output  thirteen 
fold  per  capita  during  the  last  century.  Not  the  least 
of  the  labor  saving  devices  was  the  modern  industrial 
combination  popularly  known  as  the  "Trust."  ^ 

The  declining  political  prestige  of  this  class  as  they 
are  industrially  and  financially  overwhelmed  by  the 


\  t  t 


industrial  combinations,  is  weakening  the  voice  of  tht^ 
''Trust  Buster.". 

The  small  capitalist  class  lost  control  of  the  Demo- 
cratic party  in  1904  and  since  that  time  has  only  found 
expression  in  small  ''reform"  movements,  like  Hearst's 
Independence  League,  and  "insurgent"  movements  from 
states  backward  in  their  industrial  development. 

As  this  class  has  been  hopelessly  passed  in  our  evo- 
lutionary development,  it  is  a  waste  of  time  to  further 
consider  it. 

THE  LARGE  CAPITALIST  CLASS 

In  the  year  1860  the  banking  and  manufacturing  cap- 
italists of  this  country  carried  through  a  successful  re- 
volution at  the  ballot  box,  and  vvith  their  newly  organ- 
ized Republican  party  wrested  power  from  the  slave- 
holding  and  trading  classes,  and  captured  control  of  the 
federal  government. 

This  victory  w^as  won  by  a  plurality  vote,  consequent- 
ly their  opposition  being  in  the  majority,  the  slavehold- 
ing  interests  went  into  armed  rebellion  against  federal 
authority. 

The  control  of  the  federal  government  gave  the  man- 
ufacturing and  banking  classes  an  advantage  in  the 
game  of  war,  which  the  rebels  could  not  muster  suf- 
ficient force  to  overcome. 

They  used  the  federal  authority,  backed  by  large 
armies  during  the  Reconstruction  period,  to  ruthlessly 
beat  down  any  opposition  at  the  ballot  box  and  so  kept 
the  South  practically  disfranchised. 

At  no  time  since  1860  has  the  small  capitalist  had 
control  of  the  federal  government.  His  "rights"  have 
been  trampled  upon,  and  his  code  of  morals  thrown 
aside  to  make  way  for  the  interests  of  the  large  capital- 
ist class  and  their  ideas  of  right  and  wrong. 

The  demonitization  of  silver,  the  high  protective  tar- 
iff, the  increase  in  army,  navy,  and  consular  service  all 
to  protect  the  interests  of  banker  and  manufacturer^ 
were  all  progressive  steps  in  the  furtherance  of  the  in- 
terests of  the  large  capitalists. 

The  "Imperialistic"  policy  adopted  by  the  Federal 
government  during  the  later  part  of  the  last  century, 
as  well  as  the  war  of  conquest  upon  the  Spanish,  the 
annexation  of  islands  for  coaling  stations,  the  increase 


5 

in  naval  and  military  establishments  and  the  colonial 
policy,  were  all  in  the  interests  of  the  banker  and  the 
manufacturer  and  at  the  expense  of  the  rest  of  the 
population. 

Today  the  interests  of  the  banker  and  captain  of  in- 
dustry dominate  all  our  political,  educational,  religious 
and  social  institutions.  Our  courts  decide  that  their 
wants  are  constitutional  and  that  the  demands  of  all 
other  classes  are  unconstitutional.  Their  will  is  backed 
up  bv  civil  law  and  military  forces. 

The  consolidation  of  industry  to  eliminate  the  useless 
waste  of  the  competitive  system,  has  enabled  the  large 
capitalist  to  sell  ^oods  at  a  profit,  and  furnish  them  to 
the  public  at  a  price  below  the  cost  of  production  by  his 
small  competitor. 

The  monopolists  today  are  seeking  for  some  kind  of 
trust  regulation  that  will  stop  evolution,  and  are  looking 
for  a  Joshua  to  make  the  sun  stand  still. 

They  do  not  want  the  sun  of  their  capitalist  system 
to  set  forever.  They  are  trying  to  shut  their  eyes  to 
the  fact  that  their  system  is  but  a  transitory  one  be- 
tween individual  and  co-operative  production.  Evolu- 
tion will  not  be  stopped.  Their  political  soothsayers  in 
the  House  of  Congress  very  greatly  resemble  the  In- 
dians who  tried  to  lasso  the  first  locomotive  that  passed 
through  their  hunting  grounds. 

SOME  SHORT-SIGHTED  LABOR  UNION  EDITORS 

The  merging  of  many  factories  under  one  ownership, 
some  of  the  factories  being  unionized  and  others  under 
open  shop  conditions,  made  it  possible  during  strikes 
in  union  factories  to  run  the  non-union  factories. 

This  gave  the  large  corporations  more  power  in  fight- 
ing the  trade  union  than  the  individual  competing  man- 
ufacturer possessed.  The  blacklist  became  a  more  ef- 
fective weapon  against  the  union  man  as  the  industries 
passed  into  fewer  hands. 

The  monopoly  of  the  market  by  the  trust  removed 
the  fear  of  a  competitor  securing  the  business  during 
labor  troubles. 

The  ability  of  the  monopolist  to  fix  the  price  of  the 
product  and  to  eliminate  competitors  at  will,  made  the 
monopolist  more  secure  against  any  pressure  brought 
to  bear  by  the  labor  union,  through  strikes  or  boycotts. 


6 

A  recofirnition  of  the  jofrowin.^  power  of  private  mon- 
opoly caused  the  labor  union  editors  for  many  years  to 
side  with  the  small  capitalist  "trust  busters"  in  their 
futile  endeavors  to  return  to  small  production. 

The  union  label  adopted  by  many  unions  was  in  most 
cases  a  sort  of  compact  between  union  and  small  cap- 
italist to  feht  the  "Trust." 

The  manifest  saving  of  waste  in  production  on  a  large 
scale  made  this  a  very  expensive  and  abortive  method 
of  checking  the  growth  of  large  industry. 

The  labor  editors'  most  common  misconception  was 
that  to  destroy  the  "Trusts"  would  reduce  the  cost  of 
living.  The  facts  are,  however,  that  the  "Trusts"  un- 
dersell their  individual  competitors  and  prevent  further 
competition  by  eliminating  the  waste  incidental  to 
competition  and  so  make  it  impossible  for  any  small 
firms  to  enter  the  field  again. 

The  labor  unions  of  the  world  are  awakening  to  the 
fact  that  they  must  combine  with  all  other  workers  on 
farm  and  in  workshop  in  a  political  movement  distinct 
froTH  and  opposed  to  all  parties  of  the  capitalist  class, 
large  or  small,  that  they  may  use  their  overwhelming 
numbers  to  capture  political  power.  When  they  use 
this  political  rower  to  emancipate  themselves  they  will 
establish  Socialism. 

The  nation  must  own  the  "Trusts,"  instead  of  the 
"Trust"  magnates  owning  the  nation.  To  understand 
why  we  must  do  this  we  will  review  briefly  the  indus- 
trial history  of  the  American  people,  and  find  why  this 
is  the  only  solution  of  the  "Trust"  question. 

CHAPTER  II. 

OUR  INDUSTRIAL  EVOLUTION 

During  the  time  the  American  Colonies  were  under 
the  control  of  the  British  government  the  Americans 
were  an  agricultural  and  trading  people. 

At  the  time  of  the  invention  of  the  steam  engine 
(1768)  only  two  per  cent  of  the  American  freemen 
were  wage  workers,  the  remainder  of  them  were  self- 
employing  farmers,  mechanics  and  merchants. 

A  few  ship  owners  trafficked  in  slaves,  smuggle^d 
commodities  past  the  British  custom  officers,  while 
some  other  budding  capitalists  distilled  New  England 


rum  from  West  Indian  Molasses  and  used  it  for  the 
purchase  of  slaves  in  Africa. 

The  appearance  of  the  steam  engine,  followed  by 
power  driven  machinery  in  all  industries  and  particu- 
larly in  the  weaving  industry,  increased  the  output  of 
cotton  to  an  enormous  extent,  where  the  power  looms 
and  the  cotton  gin  was  in  use.  This  eliminated  the 
handicraftsman  very  rapidly,  and  produced  the  capital- 
ist and  wage  working  classes. 

We  find  one  wage  worker  plus  a  machine  able  to  pro- 
duce in  one  day  as  much  as  five  hand  workers  had 
done.  They,  unable  to  compete  with  the  machine,  are 
compelled  to  sell  their  labor  for  a  wage  to  its  owner, 
competing  with  each  other  in  the  sale  of  their  labor. 

Those  who  remain  outside  the  gates  unemployed  are 
unfortunately  equipped  with  stomachs  that  grow  hun- 
gry about  three  times  a  day. 

The  hungry  man  outside  the  factory  will  work  for  an 
existence  wage  in  preference  to  starvation.  He  will 
not  work  for  less  than  a  living,  so  the  necessities  of  the 
hungry  man  outside  the  shop  fix  the  wages  of  the  man 
employed  within  the  shop  at  an  existence  wage. 

Since  the  establishment  of  the  wage  system  as  the 
dominant  system  in  industry,  the  averagg  pay  of  the 
average  worker  is  the  average  cost  of  living  in  every 
locality. 

During  the  time  when  machine  production  was  dis- 
placing the  hand  worker,  and  there  was  ready  sale  for 
ALL  machine  made  goods,  the  capitalist  stated  as  a 
dogma:  "Competition  is  the  life  of  trade." 

They  meant  by  this  that  the  more  people  there  were 
engaged  in  their  line  of  industry  (provided  there  was 
a  greater  demand  for  goods  than  could  be  supplied), 
the  better  opportunity  they  had  for  studying  the 
methods  of  production  and  sale  of  the  products.  It 
should  really  have  been  called  "emulation"  instead  of 
"competition." 

Each  capitalist  continually  reinvested  the  profits 
taken  froiii  his  workers  in  employing  those  working 
men  displaced  by  labor-saving  machinery,  in  building 
his  factory  larger  and  making  more  machinery  for 
him. 

It  was  the  wage  working  class  who  built  all  the  fac- 
tories, m.ade  all  the  machinery,  discovered  and  applied 


8 

new  ideas  in  increasing  output,  then  lost  their  title  to 
the  factories,  through  not  receiving  their  full  pay,  but 
only  a  LIVING  wage. 

It  was  the  wage  system  that  robbed  the  workers  of 
possession  of  the  industries  built  by  them. 

The  whole  history  of  the  development  of  our  pres- 
ent industrial  system  has  been  the  gradual  displace- 
me)it  of  independent  self-employing  hand  workers  by 
machinery  and  wage  workers.  There  has  been  a  steady 
loss  of  ownership  by  the  worker  of  the  tools  he  uses. 

The  capitalist,  as  his  factory  was  increased  in  size, 
was  compelled  to  seek  ever  wider  markets  for  his 
goods.  Commodities  are  only  made  to  sell.  No  busi- 
ness man  will  intentionally  allow  more  goods  to  be 
made  in  his  factory  than  can  be  sold  by  him. 

It  is  the  amount  of  the  demand  that  controls  the 
output.  Now  let  us  see  what  it  is  that  limits  the  de- 
mand. We  have  found  that  the  worker,  under  this 
competitive  wage  system,  only  receives  a  wage  suffic- 
ient to  buy  the  necessessaries  of  life,  which  is  but  a 
fraction  of  his  total  output. 

No  matter  how  rich  a  capitalist  may  be,  he  is  unable 
to  eat  more  than  one  meal  at  one  time.  He  can  only 
wear  one  suit  of  clothes  with  comfort  at  a  time,  con- 
sequently there  is  a  limit  to  his  ability  to  consume. 

The  capitalist  class  receives  all  the  worker  produces 
over  a  living.  It  is  a  far  larger  amount  than  the  cap- 
italist class  consumes.  These  goods  would  accumulate 
in  the  warehouses,  overflow  the  market,  and  stop  fur- 
ther production  were  it  not  for  the  fact  that  the  cap- 
italist continually  uses  his  surplus  to  hire  the  workers 
displaced  by  machinery,  to  enlarge  the  factories  and 
machinery  to  displace  more  of  the  hand  workers. 

WE  HAVE  NOW  REACHED  THE  POINT  IN  MOST 
OF  THE  INDUSTRIES  WHERE  THE  HAND  WORK- 
ERS HAVE  BEEN  COMPLETELY  ELIMINATED  BY 
MACHINERY,  AND  WHERE  THE  MACHINERY  IS 
SUFFICIENT  IN  THE  WORLD  TO  SUPPLY  ALL  OF 
THAT  KIND  OF  GOODS  THE  WORLD  MARKET 
CAN  TAKE. 

At  this  time  we  find  the  capitalists  dropping  their  old 
dogma,  "competition  is  the  life  of  trade." 

Each  capitalist,  in  his  attempt  to  continue  the  system 
of  investment  of  his  profits  in  enlarging  his  business,  iii 


9 

compelled  to  fight  desparately  with  his  fellow  capitalist 
to  prevent  having  his  market  taken  from  him.  This 
means  expensive  salesmen,  advertising,  adulteration  of 
goods  to  lower  the  cost  of  production,  and  a  greatly  in- 
creased cost  in  selling  the  product.  With  this  cut- 
throat competition  many  firms  are  forced  into  bank- 
ruptcy. 

The  cost  attached  to  the  sale  of  the  product  added 
no  value  to  it,  but  must  be  charged  to  the  consumer. 
THIS  WAS  THE  CONDITION  OF  BUSINESS  THAT 
FORCED  THE  ORGANIZING  OF  THE  "TRUSTS." 

We  will  say,  for  example,  that  there  are  thirty  firm^ 
engaged  in  one  line  of  industry.  Each  firm  must  send 
a  salesman  to  every  important  city  to  visit  their  own 
and  other  factories'  customers. 

The  wages  and  expenses  of  these  men  often  consti- 
tute 25  per  cent  of  the  price  of  the  goods.  Each  firm 
must,  if  it  intends  to  remain  in  business,  maintain  an 
advertising  system  that  will  reach  all  sections  of  the 
country. 

The  scenery  along  the  railroad  lines  is  spoiled  by 
signs  telling  how  much  better  one  firm's  goods  are  than 
anothers.  This  adds  nothing  to  the  value  of  the  goods, 
but  must  be  paid  for  by  the  customer,  or  the  firm  fails 
in  business. 

One  company  in  a  certain  territory  finds  its  market 
encroached  upon  by  competitors,  so  that  the  company 
is  forced  to  enter  the  others'  fields. 

This  makes  the  average  haul  of  the  product  to  its 
market  almost  half  way  across  the  country.  The  ex- 
penses, freight  and  express  charges  must  be  paid  by  the 
purchasers  to  make  the  business  a  success. 

Each  competing  manufacturer  has  no  definite  knowl- 
edge of  the  amount  of  goods  in  any  line  his  competitor 
intends  to  put  on  the  market.  This  anarchy  of  produc- 
tion often  throws  a  lot  of  unsalable  goods  upon  the  mar- 
ket, a  part  of  which  can  not  be  sold  at  any  price.  This 
chaotic  condition  of  business  was  but  a  logical  step  in 
the  evolution  of  the  competitive  system. 

At  this  stage  of  development,  though  the  useful 
worker  received  but  17  per  cent  of  his  product  in 
wages,  most  of  the  remainder  was  frittered  away  in  the 
wastes  of  competition. 

Many  capitalists  during  this  period  were  not  getting 


10 

profits,  but  were  actually  losing  what  they  had  pre- 
viously accumulated. 

We  will  suppose,  for  example,  that  thirty  firms 
are  engaged  in  one  industry.  We  now  see  possibly 
twenty  of  these  firms  arriving  at  the  conclusion  that 
something  will  have  to  be  done  to  end  wasteful  compe- 
tition. One  of  the  most  brainy  men  among  them  starts 
to  organize  a  trust. 

They  hold  a  meeting,  form  an  organization  similar 
to  a  labor  union,  and  enter  into  an  agreement  with 
each  other  to  fix  a  price  below  which  none  shall  go  in 
the  sale  of  their  commodities.  They  also  agree  not  to 
employ  working  people  blacklisted  by  some  other  firm 
in  the  combination.  They  agree  upon  other  points  that 
tend  to  limit  competition  between  each  other  in  the  sale 
of  their  products.  Each  firm  puts  up  security  that  it 
will  live  up  to  its  part  of  the  agreement  or  binds  itself 
by  some  other  method  mutually  satisfactory. 

A  trust  has  been  formed.  Each  man  retains  indi- 
vidual ownership  in  his  factory  and  individually  takes 
the  profits  therefrom,  having  no  share  in  the  profits 
of  the  other  firms, within  the  trust. 

Time  brought  forth  many  weak  points  in  this  form 
of  organization.  Each  firm  had  the  incentive  to  give 
rebates  secretly  to  the  others'  customers,  and  so  cap- 
ture them  from  the  rival  firms.  These  unsatisfactory 
workings,  within  the  trusts  were  the  cause  of  the  form- 
ation of  the  modern  corporation. 

The  invention  of  the  corporation  was,  next  to  the 
steam  engine,  the  most  important  invention  during 
the  existence  of  the  capitalist  system  of  wealth  pro- 
duction. It  was  tfie  creation  of  a  legal  individual  who 
nevei*  died,  who  could  hold  property,  who  shouldered  all 
responsibility,  who  could  not  be  put  in  jail,  who  could 
not  be  bung,  and  who  could  do  anything  that  any  other 
individual  could  do.  It  was  the  method  by  which  the 
business  man  could  retire  from  active  participation  in 
the  business,  have  the  business  carried  on  and  receive 
an  increased  income  from  it. 

The  capitalists  at  this  stage  of  industrial  evolution 
ordered  their  lawmakers  to  make  laws  legalizing  this 
new  method  of  doing  business. 

We  now  find  these  twenty  firms  that  had  combined 
in  the  trust,  organizing  a  new  corporation.    They  then 


11 

appraise  the  plants  of  each  firm  and  sell  them  to  the 
corporation,  taking  stock  in  the  new  company  for  prob- 
ably twice  the-  value  of  their  factories. 

They  call  this  "watering"  the  stock  and  state  in  jus- 
tification that  the  elimination  of  waste  justifies  the  in- 
creased valuation.  We  now  notice  some  revolutionary 
changes  taking  place  in  the  conduct  of  their  business. 
The  new  corporation  sends  but  one  salesman  to  each 
city  formerly  visited  by  a  salesman  from  each  of  the 
twenty  competing  firms  within  the  trust,  so  the  wages 
and  expenses  of  the  other  nineteen  salesmen  are  saved. 

Another  feature  of  the  corporation  is  that  they  use 
each  factory  to  make  the  goods  for  its  own  neighbor- 
hood and  thereby  cut  out  at  the  very  least  three- 
fourths  of  the  former  expense  for  freight. 

In  advertising  we  find  one  advertisement  represent- 
ing the  twenty  consolidated  companies.  They  may  ad- 
vertise five  times  as  much  as  each  firm  formerly  did 
previous  to  consolidation  and  still  save  three-quarters 
of  the  former  total  cost,  in  addition  to  covering  the 
field  much  more  thoroughly  than  did  their  competitors. 

Any  of  the  twenty  factories  where  the  cost  of  opera- 
tion is  high,  are  closed  down.  The  factories,  where  the 
cost  of  operation  is  cheaper,  are  increased  in  size. 

One  superintendent  now  superintends  a  large  factory 
and  gets  about  the  same  wages  he  received  when  in 
charge  of  a  small  one. 

One  engineer  is  all  that  is  needed  to  operate  one 
large  engine  that  generates  five  times  the  horse  power 
that  is  generated  by  an  engine  in  a  small  factory,  so 
several  engineers  lose  their  positions. 

The  saving  in  cost  of  management,  superintendence, 
ocsigning,  accounting,  time-keeping,  cost  of  material 
by  buying  in  large  quantities,  better  fuel  facilities 
make  it  possible  for  the  large  company  to  make  goods 
cheaper  than  its  competitors. 

They  establish  one  central  selling  agency  which  cuts 
down  eqormously  the  former  cost  of  that  department 
of  the  manufacturing  business. 

Lack  of  space  prevents  us  enumerating  hundreds  of 
other  points  where  large  production  has  an  economic 
advantage  over  small  competitive  business.  But  We 
HAVE  COVERED  ENOUGH  TO  SHOW  THE  READ- 
ER THAT  THE  NEW  CORPORATION  CAN  SELL 


12 

AT  A  PROFIT,  CHEAPER  THAN  THEIR  SMALL 
COMPETITORS  CAN  DELIVER  THE  GOODS  TO 
THE  CONSUMERS. 

IT  WAS  AT  THIS  POINT  THAT  THE  CRY  OF 
"DESTROY  THE  TRUSTS"  WENT  UP  FROM  THE 
DESPAIRING  SMALL  BUSINESS  MAN.  He  realized 
that  the  large  corporation  would  drive  him  out  of 
business  if  some  way  could  not  be  found  to  make 
evolution  stand  still  or  turn  backward. 

The  Democratic  party  in  1896,  representing  "small 
business'  interests"  under  the  leadership  of  the 
eloquent  Mr.  Brj^an,  started  out  on  a  "trust  busting" 
expedition ;  but,  alas  and  alack,  they  had  less  funds 
than  their  more  prosperous  opponents,  the  "large 
business"  men  of  the  country. 

Mr.  Bryan's  campaign  fund  was  about  $800,000, 
while  his  successful  rival  was  gently  slipped  into  the 
presidential    chair    with    an    expenditure    of    about 

$iT,ooo.ooe. 

Mr.  Bryan  found  that  it  took  more  than  eloquence  to 
win  political  campaigns,  but  undismayed  he  made  an- 
other bold  start  in  1900. 

It  is  painful  to  relate  that  the  small  capitalists  were 
harder  pressed  for  funds  for  campaign  purposes  than 
ever  before,  while  the  large  corporations  had  been  do- 
ing very  nicely  in  business  and  were  able  to  set  aside 
].irge  sums  for  political  purposes ;  the  consequence  was 
that  Mr.  Bryan  was  second  once  more. 

In  1904  the  small  capitalists  were  unable  to  put  up 
sufficient  funds  to  retain  control  of  the  Democratic 
party.  The  Wall  street  capitalists,  tired  of  furnishing 
large  funds  to  defeat  their  "small  capitalist'-  opponents 
concluded  that  it  would  be  wise  to  own  both  parties. 

They  found  the  Democratic  politicians,  who  were 
weary  of  waiting  for  the  spoils  of  office,  very  docile  and 
easily  handled. 

At  the  dictation  of  the  large  corporations  the  Dem- 
ocratic party  nominated  Mr.  Parker  for  President,  and 
also  at  their  dictation  the  Republican  Party  nominated 
Mr.  Roosevelt.  Then,  as  it  mattered  little  which  can- 
didate was  elected,  they  put  very  little  money  into  the 
campaign  fund. 

At  the  last  moment  the  large  capitalists  threw 
their  money  and  influence  to  Mr.  Roosevelt,  as  they 


13 

feared  that  the  election  of  Mr.  Parker  would  carry 
with  it  many  congressmen  who  were  opposed  to  the 
large  corporations. 

In  this  campaign  the  small  business  men  in  the  Dem- 
ocratic Party  were  very  much  dissatisfied  and  many  re- 
fused to  vote  at  all. 

During  the  next  four  years,  when  Mr.  Bryan  took  a 
trip  around  the  world,  he  studied  economics  and  pol- 
itics en  route.  He  discovered  that  the  small  business 
man  was  passing  in  all  the  industrially  developed 
nations. 

In  the  meantime  he  had  been  making  large  sums  of 
money  in  the  Texas  oil  field  in  company  with  Senator 
Bailey.  His  pocketbook  was  growing  corpulent  and  a 
contented  smile  was  settling  over  his  handsome  face. 

Mr.  Bryan  had  lost  all  desire  to  slay,  single  handed 
an  octopus,  or  roll  evolution  backward. 

In  the  campaign  of  1908  we  find  the  platforms  of 
both  the  Republican  and  Democratic  parties  practically 
identical,  plank  by  plank. 

We  also  notice  Mr.  Bryan,  with  a  contented  purr, 
accepting  the  nomination  for  President.  He  was  then 
willing  to  run  upon  the  same  platform  as  the  Republic- 
an candidate. 

The  small  capitalists  were  uttering  their  last  despair- 
ing cries  through  the  medium  of  the  Hearst  papers 
and  finding  political  expression  in  Hearst's  "Independ- 
ence League.'* 

In  the  campaign  of  1912  small  business  men  will  have 
no  candidates  to  vote  for  to  represent  their  class  in- 
terests. They  will  be  compelled  to  vote  with  the  large 
corporations      or  with  the  working  class. 

The  field  of  battle  is  clearing.  The  class  struggle 
is  on.  The  working  class  upon  one  side,  the  monopolist 
on  the  other;  one  equipped  with  numbers,  the  other 
with  gold. 

It  is  lucky  for  us  that  the  force  of  numbers,  if  in- 
telligently organized,  wins  both  at  the  ballot  box  and 
upon  the  battle  field. 

Some  of  the  wealthy  people  believe  that  by  keeping 
the  working  people  in  ignorance  and  teaching  "patriot- 
ism" to  the  children  that  they  will  be  able  tq.  keep  up 
the  present  class  rule  and  the  robbing  of  the  workers 
indefinitely.    As  one  means  to  this  end  we  find  them 


14 

spreading  the  Boy  Scout  movement,  the  Y.  M.  C.  A., 
endowing  colleges  to  control  professorships,  opposing 
laws  for  compulsory  education,  encouraging  the  use  of 
child  labor,  and  making  their  influence  felt  in  all  re- 
ligious institutions. 

They  know  that  ignorant  people  will  never  accom- 
plish self-government  and  democracy,  but  will  always 
be  dependent  upon  personal  leaders  and  an  aristocratic 
form  of  government. 

The  wealthy  insist  that  patriotism  should  be  taught, 
for  the  reason  that  patriotism  means  respect  for,  love 
of,  and  obedience  to  the  instituted  government  of  the 
country  in  which  the  individual  lives. 

Through  contributing  the  campaign  funds  they  con» 
trol  the  politicians,  law  making  and  law  enforcing  offi- 
cials, judges  to  grant  injunctions  against  the  workers 
and  soldiers  to  carry  them  out. 

Sometimes  they  desire  to  have  the  striking  working- 
men  shot,  and  need  the  militia  or  regular  soldiers  to 
do  the  work,  as  they  do  not  like  to  do  the  bloody  work 
themselves,  they  have  some  foolish  workingman  to  do 
it  for  them. 

The  working  class  is  now  becoming  too  intelligent  to 
hire  out  as  professional  murderers  for  $15.00  per 
month,  food  and  clothing.  The  workingmen  do  not  like 
to  take  an  oath  to  stop  existing  as  thinking  beings  and 
become  automatic  killing  machines,  operating  under 
the  orders  of  a  superior  officer  to  murder  their  own 
brothers  and  friends  when  ordered  to  do  so. 

The  capitalists  believe  that  if  they  only  could  teajch 
the  workingmen  militarism  when  they  are  young 
enough  that  their  minds  would  offer  no  resistance  to 
the  murderous  thoughts  to  be  inculcated,  they  might 
make  willing  soldiers  when  they  arrive  at  the  age  of 
manhood. 

Today  we  find  ministers,  teachers  and  politicians  at 
the  command  of  our  capitalists  organizing  Boy  Scouts, 
Boys'  Brigades  and  Boy  Rifle  Clubs  in  our  schools  and 
churches,  to  teach  our  little  innocent  children  (who 
should  instead  be  taught  love  and  brotherhood),  that 
murder  is  a  laudable  thing  if  done  in  uniform  and 
under  the  command  of  an  officer. 

Through  the  donations  of  the  wealthy  class  to  the 
ministers  and  churches  they  dictate  the  code  of  moral- 


15 

ity  taught  to  the  people.  The  legal  stea^hg  of  the 
country  from  the  people  and  the  continued  ^obbery  of 
the  working  class  through  the  wages  sys'^^m  is  made 
perfectly  moral  and  honest. 

A  man  can  be  a  Sunday  school  superiniandent  who 
steals  one  hundred  millions  of  dollars  yearly  from  the 
American  workingmen.  He  is  a  great  business  man; 
his  life  is  held  up  for  the  emulation  of  the  Sunday 
School  children. 

He  has  paid  his  workers  so  little  wages  that  they 
can  not  buy  the  surplus  he  has  taken  from  them.  He 
can  not  eat  it.  He  then  denies  the  workingmen  em- 
ployment, who  then  starve  for  lack  of  their  product 
which  has  been  taken  by  the  capitalists. 

When  the  children  of  these  poor  victims  of  the 
wealthy  brigands  cry  for  bread,  a  poor  father  in  des- 
peration breaks  the  laws  made  by  the  brigand  to  con- 
trol him  also  breaks  the  moral  laws  given  out  from  the 
same  source  to  mentally  control  him  by  breaking  into 
the  storehouse  of  his  master  and  taking  food  out  of  the 
store  laid  up  by  his  own  past  labor  and  using  it  to  feed 
his  starving  children. 

Other  workingmen  wearing  uniforms  seize  him,  a 
slick  judge  condemns  him  to  prison,  the  church 
obediently  sends  him  to  hell,  and  all  the  other  molders 
of  public  opinion  brand  him  as  a  thief,  and  his  fellow 
workingmen  are  taught  to  ostracize  him. 

It  is  legal,  moral  and  right  to  steal  wholesale  from 
the  poor,  but  taking  food  from  the  rich,  when  hungry, 
is  a  crime. 

When  the  Socialist  advocates  making  all  kinds  of 
stealing  illegal  we  find  the  wealthy  up  in  arms  against 
them,  and  all  their  mouthpieces,  parrot-like,  from  min- 
ister to  petty  politicians,  denouncing  the  Socialist. 

Karl  Marx,  when  he  wrote  "Das  Kapital,"  before  the 
American  Civil  War,  showed  us  why  "Trusts"  must  in- 
evitably result  from  the  competitive  system.  He  also 
showed  us  why  their  combinations  would  grow  into 
still  larger  combinations,  or  mergers  of  many  indus- 
tries into  one  company,  and  then  that  the  nation  would 
be  compelled  to  take  over  and  operate  these  industries 
to  serve  the  people  instead  of  exploiting  them. 

We  have  already  developed  the  merger  of  many  in- 
dustries under  one  corporate  ownership.    The  Standard 


16 

Oil  magnates  control  more  than  one  hundred  American 
industries. 

When  one  industry  has  been  trustified  for  the  reason 
that  competition  was  impossible  any  longer,  we  find 
the  profits  taken  by  the  large  corporations  amount  to 
much  more  than  the  aggregate  profits  of  the  individual 
firms  before  the  consolidation. 

They  can  not  invest  these  profits  in  the  same  line  of 
business,  as  there  was  already  more  than  enough  fac- 
tories and  machinery  before  consolidation  was  forced 
upon  them ;  it  was  this  fact  that  first  caused  the  forma- 
tion of  the  trust.  . 

They  use  their  profits  to  buy  up  and  organize  an- 
other industry  then,  unable  to  invest  further  in  that 
industry,  they  must  use  the  profits  of  the  two  in- 
dustries to  buy  up  a  third.  We  find  their  capital  in- 
creasing with  greater  speed  as  time  goes  on;  it  is  like 
a  snow  ball  rolling  down  a  mountain  side,  gaining  speed 
and  weight  on  its  way. 

If  the  system  continues  a  few  years  longer,  one  com- 
pany of  men  will  own  the  earth  and  the  rest  of  us  will 
be  enslaved  to  these  masters  of  the  bread. 

So  it  is  easy  to  see  that  no  matter  how  hard  the 
capitalist  class  work  to  keep  us  in  ignorance  or  how 
carefully  they  try  to  preserve  dogmas  both  as  to  prop- 
erty, morals  and  ancestral  institutions,  hunger,  if 
nothing  else,  will  drive  us  to  make  very  revolutionary 
changes  in  our  governmental  institutions. 

We  cannot  remain  stationary  even  if  we  desire  to. 
We  can  not  retain  the  present  status  of  society,  no  mat- 
ter how  hard  we  try.  We  can  not  retrogress  in  our 
social  development. 

The  inevitable  trend  of  evolutionary  forces  are 
sweeping  onward  into  the  very  gates  of  the  Co-oper- 
ative Commonwealth. 

CHAPTER  III. 

In  the  last  chapter  we  have  found — First :  The  com- 
petitive system  was  a  natural  development  from  the 
old  system  of  private  ownership  of  the  privately  used 
tools  into  the  private  ownership  of  the  collectively  used 
tools. 

Second :  That  the  economic  advantage  of  the  capital- 


17      . 

ist  in  owning  the  things  necessary  to  the  very  life  of 
the  rest  of  the  people  enabled  him  to  buy  their  labor  at 
the  cost  of  their  living. 

Third :  That  the  wealth  produced  by  the  workers  and 
taken  by  the  capitalist  under  the  wage  system  was  con- 
tinually reinvested  in  hiring  the  workers  displaced  by 
the  machine  production  to  build  larger  factories  and 
more  machinery. 

Fourth:  When  the  factories  were  built  larger  than 
the  market  demand  required,  the  cost  of  selling  the 
product  grew  rapidly,  and  the  wastes  of  competition 
were  enormous. 

Fifth:  The  trust  was  the  first  attempt  to  limit  the 
waste  of  competition,  but  it  did  not  fulfill  the  expecta- 
tions of  its  organizers,  and  it  soon  gave  way  to  a  better 
plan  of  organization,  namely,  the  modern  corporation. 

Sixth:  The  corporation  proved  a  successful  way  of 
securing  co-operation  among  the  capitalists  for  the  ex- 
ploitation of  the  workingmen  collectively  employed. 

Seventh :  When  one  industry  was  organized  and  there 
were  sufficient  factories  and  machinery  to  supply  the 
market,  the  owners  of  that  industry  were  compelled  to 
invest  their  profits  in  buying  up  and  organizing  other 
industries.  The  development  of  the  system  is  leading 
inevitably  to  a  merger  of  all  the  industries. 

Eighth.  As  the  wastes  of  competition  are  eliminated 
and  all  useless  labor  dispensed  with,  a  tremendous  un- 
employed problem  results.  The  workers  competing  for 
employment  keep  the  wages  at  the  average  cost  of 
existence.  The  few  capitalists,  unable  to  consume  the 
surplus,  are  also  unable  to  further  invest  it  in  hiring 
workingmen  to  build  more  factories  and  machinery; 
consequently  the  capitalist  system  is  breaking  down 
for  lack  of  a  market. 

Ninth:  The  history  of  social  development  down 
through  the  ages  has  shown  us  that  when  for  anj^" 
reason  the  social  institutions  do  not  provide  a  method 
of  getting  a  living  for  the  majority  of  the  people  a 
revolution  always  results.  This  revolution  solves  the 
bread  question  for  a  time  at  least,  breaks  down  the  old 
institutions,  and  puts  a  new  social  class  in  control  of 
the  political  government.  A  study  of  the  "trust" 
question  shows  us  that  revolution  not  only  is  inevitable 
but  imminent. 


18 

Tenth:  A  study  of  this  question  forces  us  to  the  con- 
clusion that  the  only  class  that  can  bring  order  out  of 
chaos,  and  that  has  both  the  power  and  inclination  to 
brint?  about  a  change  for  the  better,  is  the  working 
class.  Their  overwhelming  numbers  make  possible 
their  victory,  either  at  the  ballot  box  or  upon  the 
battle  field. 

For  the  last  few  years  they  have  not  only  done  all 
the  work  of  the  world,  but  as  hired  managers  they  have 
superintended  it.  They  are  fully  equipped  to  take  over 
the  industries  and  use  them  in  producing  for  USE  in- 
stead of  PROFIT.  When  they  themselves  receive 
their  full  product  there  will  be  no  unsalable  surplus 
clogging  the  wheels  of  industry. 

,  Self -perservation  will  force  the  people  to  adopt  So- 
cialism. 

CHAPTER  IV. 

WHAT  IS  SOCIALISM? 

Socialism  is  the  next  stage  in  social  and  industrial 
evolution  after  private  monopoly.  It  will  not  come  as  a 
**scheme"  or  "plan"  to  be  adopted  by  society,  but  will 
grow  out  of  the  needs  of  the  people.  It  will  come  in 
spite  of  the  dogmas  of  doctrinaires.  It  will  come  in 
spite  of  the  mistakes  and  ill-judged  propaganda 
methods  of  its  friends.  It  will  come  in  spite  of  the 
many  cranks  and  faddists  who  have  attached  them- 
selves to  the  Socialist  movement  and  have  tacked  on 
to  our  propaganda  their  little  pet  schemes. 

All  the  manufacturers'  and  merchants'  associations 
in  the  world,  with  their  labor  spy  systems  attempting 
to  pervert  and  destroy  our  movement,  can  do  little 
more  than  check  for  a  time  the  adoption  of  Socialism 
and  the  overthrow  of  class  rule. 

Socialism  is  coming  in  spite  of  the  blunders  of  friends 
and  the  opposition  of  enemies — why  ?  Because  nothing 
else  will  enable  the  people  to  live  and  make  further 
progress. 

What  is  Socialism?  Co-operation  by  the  entire  na- 
tion in  ownership  and  operation  of  the  industries  of 
the  country.  We  must  have  everything  that  is  used 
together  owned  collectively. 

We  want  things  used  privately  to  be  owned  privately. 


19 

We  must  establish  a  perfect  democracy  both  in  con- 
trol of  government  and  our  industrial  system. 

The  control  by  the  whole  people  is  even  more  impor- 
tant than  having  the  nation  merely  own  them. 

The  ownership  of  some  industries  by  the  government 
under  the  control  of  political  parties  dominated  by  cap- 
italists is  not  Socialism,  but  state  capitalism. 

State  capitalism  is  just  as  objectionable  to  the  So- 
cialist as  private  capitalism,  because  its  power  over  the 
people  is  greater.  All  its  co-operative  advantages  are 
appropriated  by  the  capitalist  class. 

The  Postoffice  Department  is  a  fair  example  of  state 
capitalism.  .; 

Mr.  Taft,  as  the  representative  of  the  Republican 
party,  which  is  financed  by  the  capitalist  class  in  all  its 
campaigns,  is  endeavoring  in  his  managements  of  the 
Postoffice  Department  to  further  the  interests  of  the 
capitalist  at  the  expense  of  the  workers. 

He  is  increasing  the  amount  of  work  expected  of  each 
employe  and  shouldering  the  work  of  each  e.nploye  dis- 
charged upon  those  retained.  The  reason  for  this  is 
easy  to  comprehend.  Capitalists  do  not  work  in  the 
Postoffice,  but  they  send  the  bulk  of  the  mail,  in  carry- 
ing on  the  correspondence  incidental  to  their  business. 

They  want  cheap  postage.  Mr.  Taft  intends  to  give 
them  penny  postage,  provided  he  can  increase  the 
amount  of  work  done  by  each  employe  without  increas- 
ing their  compensation. 

All  schemes  of  state  capitalism  are  merely  efforts  on 
the  part  of  the  capitalist  class  to  cut  down  the  expenses 
of  hiring  labor  to  perform  some  social  function  for  all 
the  capitalists  that  none  could  do  as  economically  if 
each  individually  employed  this  labor.         . 

The  Socialists  desire  above  all  things  to  overthrow 
the  capitalists'  control  of  political  power  and  their  pri- 
vate ownership  of  the  industries,  which  they  have 
made   legal  by  their  use  of  this  political  power. 

The  Socialists  desire  a  system  of  industry  under 
which  the  people  will  own  and  operate  all  the  collective- 
ly used  tools  of  production,  distribution  and  communi- 
cation. They  desire  to  pay  themselves  their  product 
without  dividing  up,  as  we  do  now,  with  the  capitalist 
class. 

We  Socialists  are  tired  of  dividing  up. 


20 

The  workers  have  dug  the  mines,  built  the  factories, 
made  the  machinery,  constructed  the  railroads,  but  the 
workers  own  none  of  these  things ;  they  are  divided  up 
among  a  few  wealthy  men.  The  capitalists  will  only 
let  us  use  these  necessary  things  provided  we  will  agree 
to  go  on  dividing  with  them. 

When  we  work  with  these  tools  of  production  owned 
by  the  capitalists  they  take  our  product  from  us  and 
divide  it,  then  hand  us  out  of  the  pay  windows  sufficient 
money  to  buy  an  existence  for  ourselves  and  a  small 
family,  then  divide  the  remainder  of  our  product  among 
the  capitalist  class. and  the  parasites  who  hang  upon 
them. 

They  use  some  of  this  product  collected  through  a 
system  of  taxation  in  maintaining  the  police  and  sol- 
diers to  keep  their  workers  submissive  to  their  laws 
and  their  judges'  decisions. 

They  contribute  voluntarily  sufficient  money  to  domi- 
nate colleges  and  religious  institutions,  so  that  their 
code  of  ethics  and  morals  shall  be  taught  the  people  as 
perfect  justice  and  absolute  truth. 

It  is  quite  an  interesting  system,  and  it  has  worked 
for  more  than  a  hundred  years. 

It  is  only  breaking  down  now  through  its  inability 
to  find  someone  to  buy  the  surplus  products  extracted 
from  the  workers.  As  a  system  of  production  it  was 
more  effective  that  any  system  previously  known  to 
the  human  race.  It  has  made  possible  the  production 
of  thirteen  times  as  much  wealth  per  capita  as  we  were 
able  to  produce  one  century  ago.  It  has  not  failed  in 
production:  it  has  only  failed  in  distribution. 

As  the  productive  power  of  the  worker  increases 
by  the  elimination  of  the  waste  of  competition,  his  buy- 
ing ability  remains  stationary,  held  down  to  the  bare 
cost  of  his  living,  by  the  competitive  wage  system. 

The  capitalist,  himself  unable  to  consume  the 
profits,  finds  his  own  business  failing  for  lack  of  a 
market  for  the  goods. 

The  capitalist  system  has  outlived  its  usefulness  and 
must  pass  into  history,  as  each  previous  system  has 
done,  when  the  evolution  of  industrial  methods  has 
necessitated  a  change. 

During  the  past  twenty  years  the  corporations  have 
eliminated  much  useless  labor. 


21 

Socialism  will  do  away  with  much  more  useless  work. 

Today  the  publicly  owned  Postoffice  permits  no  lost 
motion,  or  doing  of  unnecessary  work,  but  the  capitalist 
class  is  almost  the  sole  beneficiary.  You  will  notice 
that  but  one  postman  delivers  all  the  mail  on  your, 
street,  while  possibly  twenty  grocery  wagons  during 
the  day  will  deliver  groceries  each  to  a  few  of  the  fam- 
ilies in  the  block.  Each  of  their  different  teams  must 
be  maintained,  when  one  team  and  one  driver  could  do 
the  work  possibly  more  efficiently.  This  additional  cost 
must  be  charged  to  the  consumer.  This  is  but  one  of 
the  thousands  of  instances  where  labor  is  wasted  under 
the  capitalist  system. 

The  system  of  consolidation  in  business,  to  eliminate 
this  waste,  only  benefits  the  capitalists  and  throws  the 
worker  out  of  employment.  With  Socialism,  as  the  sys- 
tem would  be  co-operative,  it  would  lessen  the  labor  of 
the  entire  people  and  increase  the  income  of  each.  To- 
day it  is  not  necessary  to  spend  time  or  money  ad- 
vertising postage  stamps.  Postage  stamps  do  not 
fluctuate  in  value.  If  there  is  only  one  two-cent  stamp 
left  in  the  office  its  price  is  still  two  cents.  There  are 
no  bargain  sales  in  postage  stamps. 

All  the  people  wear  shoes.  A  great  deal  of  the  time, 
labor  and  money  is  wasted  telling  the  people  truthfully 
or  otherwise  that  one  manufacturer's  shoes  are  better 
than  the  rest  of  the  shoes  on  the  market. 

When  we  buy  shoes  we  are  liable  to  find  paper  substi- 
tuted for  leather.  The  manufacturer  has  the  incentive 
under  this  profit  system  to  deceive  and  swindle  the 
public. 

When  we  buy  postage  stamps  we  know  exactly  what 
we  are  going  to  get  and  that  they  are  the  cost  of  carry- 
ing the  letter  to  its  destination. 

Is  it  not  perfectly  logical  that  we  as  a  nation  can 
make  and  distribute  our  shoes  to  the  consumer  at  the 
cost  of  doing  this  public  service  as  easily  as  we  carry 
our  mails? 

Today  the  shoemaker  and  other  workers  employed  in 
the  production  and  distribution  of  our  shoes  must  make 
and  handle  seven  pairs  of  shoes  before  they  receive 
wages  sufficient  to  buy  one  pair ;  then,  as  the  capitalist 
class  are  not  equipped  with  feet  like  a  centipede,  and 
can  not  wear  out  the  other  pairs  of  shoes,  the  workers 


22 

are  thrown  out  of  employment.  There  are  more  shoes 
than  can  be  sold.  The  people  then  in  childlike  wonder 
say,  "Why  is  it  that  shoemakers'  children  always  go 
barefoot  T* 

Did  you  ever  stop  to  think  why  the  food  we  buy  con- 
tains so  much  adulteration  and  poison  ?  It  is  due  to  the 
profit  system.  It  pays  the  capitalist  to  substitute  some 
cheap  adulteration  or  use  some  poisonous  preservative 
in  it  to  conceal  the  fact  that  he  is  furnishing  food  that 
is  unfit  for  human  consumption.  Under  Socialism  the 
poisoning  of  the  people's  food  will  discontinue. 

When  your  wife  prepares  jellies  and  cans  the  fruit 
for  the  use  of  your  family  during  the  winter  she  makes 
them  as  pure  and  as  edible  as  possible,  as  her  own  loved 
ones  are  to  consume  them. 

When  the  whole  nation,  working  collectively  under 
Socialism,  prepare  their  food  supply,  they  will  not 
poison  it  for  the  same  reason. 

The  last  census  reports  showed  that  there  were  more 
than  one  million  of  our  most  beautiful  girls  living  in 
houses  of  prostitution.  Did  you  ever  stop  to  consider 
the  reason  for  this  ?  It  is  one  of  the  by-product  of  the 
capitalist  system.  • 

Single  men  compete  with  married  men  for  employ- 
ment. The  average  cost  of  living  for  ALL  sets  the 
wage.  The  wages  resulting  from  this  competition  are 
not  sufficient  for  the  married  man  to  support  many 
children. 

The  young  boys  and  girls  go  to  work  at  an  early  age 
to  earn  enough  for  clothing,  as  the  father's  wage  is  not 
sufficient  to  buy  enough  for  all. 

The  competitions  of  the  young  girls  partially  support- 
ed by  their  parents  brings  the  average  female  wages 
considerably  below  the  cost  of  living  of  this  girl  if 
thrown  on  her  own  resources. 

Census  bulletin  number  one  hundred  and  fifty,  issued 
by  the  United  States  government,  shows  the  average 
wage  paid  to  females  in  New  York  city  to  be  $4.00  per 
week,  the  average  cost  of  their  living  to  be  $8.00  per 
week,  and  as  a  direct  result  50,000  girls  are  in  houses 
of  prostitution  in  that  city. 

You  can  moralize,  resolute  and  form  societies  for  the 
suppression  of  vice,  and  send  ministers  with  ante- 
diluvian intellect?:  to  prosecute  these  girls,  have  them 


23 

arrested  and  fined,  and  add  still  more  to  the  torture 
that  society  has  already  inflicted  upon  them,  but  you 
will  find  prostitution  steadily  increasing. 

It  is  disgusting  to  see  some  "holier  that  thou  art" 
people  upholding  the  capitalist  system  and  putting  in 
their  time  hounding  the  poor  victims  of  it. 

Socialism  will  prevent  both  physical  and  mental 
prostitution. 

Under  Socialism  the  nation  will  give  access  to  the 
means  of  producing  wealth  to  all  the  people. 

Society  will  pay  the  individual  the  full  social  value 
of  his  product  undimished  by  profit  for  any  parasite 
class. 

With  two  or  three  hours  work  a  day  a  girl  could  earn 
a  good  living  and  buy  all  the  pretty  clothes  she  needed. 
No  girls  would  want  to  follow  the  disagreeable  life  of 
the  prostitute,  v/hich  kills  them  within  five  years,  and 
make  that  five  years  a  nightmare  from  which  death  is 
usually  a  welcome  relief. 

And  an  even  more  disgusting  form  of  prostitution  is 
that  of  the  intellect  of  writers,  preachers,  college  pr'o- 
fessors,  politicians  and  other  public  men  who,  for  the 
payment  of  money,  lie  to  the  general  public,  the  work- 
ing class  in  particular.  They  declare  the  present  sys- 
tem just,  ethical,  divinely  moral,  impossible  of  change, 
desirable,  equitaJDle,  and  a  lot  of  other  things  that  it  is 
not. 

It  would  be  amusing  if  it  were  not  so  disgusting  to 
see  a  journalist  who  voted  the  Republican  ticket  editing 
a  Democratic  newspaper,  or  a  professor  of  economics 
in  a  Rockefeller  university,  teaching  the  Adam  Smith 
school  of  thought  to  the  students  when  his  own  invest- 
igation had  exploded  the  ideas  he  was  inculcating. 

It  is  painful  to  see  a  Christian  minister  throwing 
aside  all  the  teachings  of  Jesus,  discarding  all  thoughts 
of  love  and  brotherhood,  and  conforming  to  the  moral 
code  of  his  wealthy  church  members,  defending  capital- 
ism with  its  lying,  cheating,  adulteration  of  food,  war, 
prostitution,  merciless  individualism  and  its  complete 
antagonism  to  the  morals  and  ethics  of  the  Lowly 
Nazarene. 

The  demands  of  the  commercial  and  manufacturing 
capitalists  for  markets  causes  them,  from  time  to  time, 
to  plunge  nations  into  war.     They  always  send  their 


24 

working  people  to  fight  their  battles.  The  intellectual 
prostitutes  employed  by  the  capitalists  tell  the  people 
that  wars  are  just,  necessary,  patriotic,  and  in  the  in- 
terest of  ALL  the  people. 

Christian  ministers,  purposely  forgetting  the  teach- 
ings of  Jesus,  acceptd  salaried  positions  as  chaplains  of 
each  regiment,  upon  both  sides  during  the  war,  and 
each  cheers  his  side  on  to  battle,  each  declaring  that 
God  Almighty  is  upon  his  side  in  the  fight. 

They  give  divine  sanction  to  the  wholesale  murder. 
Stop  for  one  moment  and  form  a  mental  picture  of 
Jesus,  who  turned  the  other  cheek  when  smitten  on 
one,  urging  men  on  to  wholesale  murder,  to  further  the 
commercial  interests  of  a  group  of  parisitic  capitalists. 

The  prostitution  of  unfortunate  girls  contains  no 
degradation  compared  to  this. 

Socialism  will  make  the  people  co-operators,  instead 
of  competitors,  abolishing  all  classes,  and  through 
furnishing  a  market  for  all  the  goods  by  payment  to 
the  producer  of  his  full  product,  will  effectually  end  all 
war,  remove  the  cause  of  intellectual  prostitution  and 
place  the  world  in  harmony  with  the  co-operative  teach- 
ings of  Jesus. 

The  morals  and  ethics  of  the  new  society  will  reflect 
the  material  interests  of  all  the  people,  not  of  a  dom- 
inant predatory  class  as  at  present. 

The  incentive  to  lie,  cheat,  adulterate,  steal  and  to 
intellectually  befog  the  people  will  be  destroyed. 

In  but  few  years  our  children  will  visit  some  land- 
locked bay,  where  some  of  the  present-day  warships 
will  be  preserved  as  relics  to  show  the  children  the 
barbarous  tools  of  murder  used  by  their  ancestors  for 
the  destruction  of  life  and  property  before  the  people 
emerged  from  the  savage  system  of  capitalism. 

They  will  look  back  upon  us  as  little  better  than 
savages,  steeped  in  ignorance  and  superstition,  always 
willing  to  murder  each  other  to  secure  a  little  loot. 

They  may  be  amused  at  the  way  we  bowed  down 
before  king,  potentate  and  ancient  institutions  that  had 
long  outgrown  their  usefulness. 

They  will  consider  us  a  superstitious  people  who 
worshiped  our  ancestors  and  allowed  ourselves  to  be 
governed  by  men  who  had  been  dead  for  centuries. 

When  we  consider  the  rapid  industrial  development 


25 

and  the  wonderful  inventions  of  the  last  hundred  years 
we  are  astounded  by  the  slow  mental  development  of 
the  same  period. 

It  can  only  be  accounted  for  by  the  fact  that  the 
capitalist  who  desires  no  change  to  take  place  in  our 
industrial  system  controlled  our  educational  institu- 
tions. 

From  the  cradle  up  we  are  taught  that  the  present 
political  and  social  institutions  must  remain  as  they 
are.  Any  criticism  of  our  existing  government  is  call- 
ed unpatriotic  and  brands  the  critic  a  traitor  to  his 
country. 

Any  disagreement  with  the  teachings  of  the  preacher 
classes  you  with  the  infidels  and  the  remainder  of 
society  shun  you  as  if  you  were  a  leper. 

Any  opposition  to  the  morality  of  our  present-day 
society  brands  you  an  outlaw,  and  punishes  you  not 
only  by  social  ostracism,  but  by  imprisonment  and  pos- 
sible death  should  they  consider  your  crime  suflUciently 
reprehensible. 

They  have  enslaved  us  both  mentally  and  physically. 

We  must  break  the  mental  chains  before  we  can 
shake  off  the  physical  ones. 


CHAPTER  V. 

THE  SOCIALIST  PARTY 

Public  ownership  of  public  utilities  would  be  of  no 
value  to  the  public  without  an  absolutely  popular  gov- 
ernment. 

We  must  democratize  our  political  institutions.  We 
must  have  and  use  the  initiative,  referendum  and  right 
of  recall  of  all  our  officials,  especially  of  judges. 

We  must  extend  direct  legislation,  gradually  substi- 
tuting it  for  representative  government.  No  man  can 
represent  any  man  on  all  questions.  It  is  only  by  direct 
vote  of  the  people  on  any  question  that  the  real  opinion 
of  the  people  can  be  secured. 

The  female  sex  is  about  one-half  of  the  population. 
They  are  just  as  useful  and  as  necessary  as  the-  other 
half.  They  must  obey  the  laws  made  to  govern  the 
people,  and  if  we  stand  for  justice  and  self-government 
we  must  extend  the  suffrage  to  them  as  well  as  to  men, 


26 

otherwise  they  are  voiceless  in  the  making  of  the  laws 
and  under  no  obligation  to  obey  them. 

If  we  take  the  women  into  partnership  in  the  raising 
of  families  and  the  maintainance  of  the  home  they 
should  be  taken  into  full  partnership  and  allowed  to 
vote  upon  the  laws  made  to  govern  our  social  relation- 
ships. 

The  Socialists  consequently  advocate  universal  suf- 
frage. The  Socialist  party  is  working  to  bring  all  tools 
of  social  production  that  are  used  collectively  under 
public  ownership  and  control.  We  desire  to  have  all 
things  that  are  privately  used  under  private  ownership. 

The  Socialist  party  desires  to  establish  freedom  of 
speech,  freedom  of  the  press  and  freedom  to  follow  any 
line  of  religious  thought  that  the  conscience  of  each 
individual  dictates. 

The  Socialist  does  not  desire  to  destroy  any  church 
nor  to  establish  a  state  church,  but  considers  religion  a 
matter  of  each  person's  own  conscience. 

The  Socialist  party  is  not  a  religious  sect,  fad, 
scheme  or  Utopian  dream,  but  a  political  party,  organ- 
ized for  the  purpose  of  bringing  about  a  political  re- 
volution. It  desires  to  abolish  class  government  and 
establish  one  that  is  democratic  in  its  operation  and 
that  it  is  so  constructed  that  it  will  remain  so. 

We  have  built  within  our  party  the  machinery  of 
popular  self-government.  We  have  succeeded  in  estab- 
lishing a  system  within  the  party  by  the  use  of  which 
leaders  are  not  necessary. 

Through  many  years  of  experience  we  have  improved 
from  time  to  time  this  system  of  self-government  until 
it  now  works  smoothly  and  effectively. 

Our  party  raises  its  campaign  funds  by  a  dues-paying 
system.  In  most  local  organizations  of  the  party  the 
dues  are  25  cents  per  month,  5  cents  of  which  is  ex- 
pended by  the  national  committee,  5  or  10  cents  by 
the  state  committee  and  the  remainder  for  local  cam- 
paign work  for  the  local  organization. 

Both  state  and  national  committees  are  elected  by 
referendum  vote  of  the  membership,  and  are  subject  to 
recall  before  the  end  of  their  term  by  this  method. 

The  platform  and  party  rules  are  passed  upon  by  the 
membership  before  they  become  the  law  of  the  party. 
You  are  invited  to  join  the  local  organization  in  your 


27  '     '' 

locality,  and  you  will  at  once  be  given  full  voice  and 
vote  in  the  internal  affairs  of  the  party. 

The  old  political  parties  run  quite  differently.  They 
are  autocratic  in  their  control.  There  is  a  material 
reason  for  ''boss  control"  in  all  the  old  parties.  With 
their  form  of  organization  nothing  else  is  possible. 

Every  party  requires  finances  to  conduct  its  pro- 
paganda. 

Both  Republican  and  Democratic  parties  expend 
more  money  in  each  campaign  than  the  aggregate 
salaries  of  the  officials  to  be  elected. 

The  candidates  could  not  furnish  these  funds  and 
live.     Where  do  they  get  them? 

The  business  interests  contribute  the  needed  money. 
Some  give  to  one  side,  some  to  the  other,  while  many 
give  to  both,  desiring  to  have  friends  at  court  no  matter 
which  way  the  election  goes. 

Why  do  hard-headed  business  men  give  funds?  Is  it 
because  they  are  generous?  Hardly.  They  desire  le- 
gislation to  protect  their  interests  and,  of  course,  have 
to  pay  for  it. 

What  are  their  interests  ?  To  hire  labor  cheap,  to  sell 
the  workers  their  product  at  a  high  price,  to  charge 
usurious  rates  of  interest  on  money  loaned  to  poor  peo- 
ple, to  secure  high  rentals  for  their  properties,  to  have 
the  protection  of  law,  judge,  policeman  and  soldier  in  all 
their  struggles  against  the  working  people  over  the 
wage  question.  They  desire  to  legalize  their  code  of 
morals,  and  force  the  rest  of  the  people  to  obey  them. 

Republican,  Democrats,  Prohibition,  Progressive,  and 
all  reform  parties  not  using  the  dues-paying  system 
are  dependent  for  their  campaign  funds  upon  the  cap- 
italist class. 

To  receive  these  funds  they  are  careful  to  nominate 
men  acceptable  to  the  capitalist  class. 

Every  man  elected  to  office  by  these  parties  knows 
that  he  must  stand  by  the  capitalist  class,  or  his  career 
as  an  office-holder  is  ended.  He  may  be  a  nice  man,  a 
temperate  man,  a  good  friend,  a  loving  father,  and  a 
good  husband,  but  to  hold  his  meal  ticket  he  must  be  a 
good  servant  to  the  capitalist  class  and  take  their  part 
in  every  struggle  against  the  laboring  man. 

You  never  read  of  any  governor  of  any  state.  Repub- 
lican or  Democratic,  calling  out  the  militia  to  shoot  the 


28 

employer  during  labor  troubles.  You  never  hear  of  a 
judge,  during  a  strike,  issuing  an  injunction  against  an 
employer.  It  is  always  against  the  poor  striker.  You 
never  hear  of  a  legislature  passing  laws  to  protect  the 
working  people  from  the  greed  of  the  employing  class, 
unless  the  Socialist  vote  has  grown  to  dangereous  pro- 
portions and  the  capitalists  hope,  by  granting  inconse- 
quential reforms,  to  satisfy  the  people  and  check  the 
rising  tide  of  revolution. 

No  reform  short  of  abolishing  capitalistic  ownership . 
and  control  of  the  people's  means  of  getting  a  living  is 
of  much  real  value  to  them. 

Nothing  short  of  Socialism  will  solve  the  unemployed 
problem  which  now  confronts  us. 

SOCIALISM  IS  THE  ANSWER  TO  THE  TRUST 
QUESTION,  AND  THERE  IS  NO  OTHER  POSSIBLE 
ANSWER. 

Your  place  is  inside  the  ranks  of  the  Socialist  party. 
You  must  take  your  place  with  the  men  and  women 
working  for  the  establishment  of  a  social  system  that 
will  contain  no  prostitution,  child  labor,  poverty, 
misery,  degradation,  adulteration,  cheating,  lying,  war, 
hypocrisy,  starvation  and  deceit,  but  will  build  upon 
the  ruins  of  the  failing  capitalist  system  a  social  order 
that  is  co-operative  instead  of  competitive,  and  with  a 
government  administered  by  the  people  and  for  the 
people  instead  of  a  plutocracy  industrial  and  political  as 
at  present. 

VOTE  FOR  SOCIALISM,  TALK  TO  YOUR  NEIGH- 
BOR AND  ENLIGHTEN  HIM  UPON  THIS  SUBJECT. 

READ  MORE  BOOKS  DEALING  WITH  SOCIAL 
PROBLEMS. 

SUBSCRIBE  FOR  SOCIALIST  PAPERS  AND 
HEAR  THE  WORKERS'  SIDE  OF  THE  EVERY-DAY 
QUESTIONS  THAT  COME  BEFORE  US. 

JOIN  THE  SOCIALIST  PARTY  "LOCAL"  IN 
YOUR  TOWN. 

THERE  WILL  BE  SOME  MEANING  TO  THE 
SONG,  '^MY  COUNTRY,  'TIS  OF  THEE,"  WHEN 
THE  SOCIALISTS  WIN. 

THE  END. 


AMERICAN  PANICS 

A  HISTORY  OF  AMERICA'S  INDUS- 
TRIAL DEVELOPMENT,  AND  THE 
SIX  INDUSTRIAL  DEPRESSIONS, 
WITH    THEIR    CAUSE    AND    CURE 

(Written  Dec.  1907.) 


CHAPTER  L 

THE  CAUSE 

In  ancient  times,  when  there  was  starvation  in  the 
land,  it  was  caused  by  failure  of  crops,  war  or  lack  of 
industry  on  the  part  of  the  people. 

It  is  only  within  the  past  one  hundred  years  that  a 
people  have  starved  for  the  reason  that  there  was  too 
much  food  produced. 

The  so-called  "panic  of  plenty"  is  of  modern  date 
and  is  peculier  to  the  capitalist  system  of  wealth  pro- 
duction. 

The  chattel  slave  never  had  to  starve  because  he 
had  filled  the  storehouse  with  food. 

The  feudal  serf  was  sure  of  enough  to  eat  and  a  place 
to  sleep  when  he  had  good  crops  upon  the  Baron's  land. 

At  the  time  of  the  American  Declaration  of  Inde- 
pendence only  2  per  cent  of  the  American  people  were 
wage  workers  employed  by  capitalists,  while  today 
most  of  the  people  are  in  the  wage-working  class. 
The  capitalist  class  today  own  practically  all  the  means 
of  producing  the  things  we  need  to  eat  and  wear,  and 
if  they  do  not  own  all  the  farms,  they  own  the  means 
of  carrying  the  farm  products  to  the  consumer,  which 
for  their  purpose,  is  equally  effective. 

We  will  date  capitalism  as  a  system  in  this  country 
from  the  Revolution  of  1776.  About  that  time  the 
steam  engine  was  invented.  Many  power-driven  ma- 
chines also  appeared  that  made  it  possible  for  one  man, 
plus  a  machine,  to  do  the  work  of  several  men  who  did 


30 

not  have  a  machine  to  work  with,  but  were  dependent 
upon  the  old  hand  methods. 

THE  HAND  WORKER,  WHO  HAD  WORKED  IN 
HIS  OWN  SHOP,  COULD  NOT  COMPETE  WITH  THE 
FACTORY  PRODUCT  AND  EARN  A  LIVING.  THIS 
DROVE  HIM  TO  THE  MACHINE  OWNER  TO  SEEK 
EMPLOYMENT. 

As  each  machine  displaced  several  hand  workers,  he 
found  several  men  looking  for  the  same  job. 

The  competition  for  employment  among  those  who 
owned  no  machines  kept  their  wag^s  down  to  the 
average  cost  of  existance  for  people  of  the  working 
class  in  that  neighborhood. 

Some  workers  who  formed  labor  unions  to  modifj'' 
this  competition,  succeeded  in  raising  their  wages  a 
little  above  the  average  cost  of  living.  Some  work- 
men who  were  so  skillful  that  their  place  in  the  shop 
was  difficult  to  fill  also  received  a  little  more  than  the 
average. 

As  some  skilled  workers  received  a  little  above  the 
average,  we  see  some  unskilled  men  (among  whom 
(existed  the  strongest  competition  for  employment  and 
loss  unions)  getting  less  than  a  decent  living. 

Every  year  the  workmen  increased  their  product 'on, 
more  machinery  was  made,  but  the  workers'  share  of 
his  product  remained  a  bare  existence. 

The  capitalists  retain  the  balance  of  the  workers* 
product  in  shape  of  profit,  rent  and  interest. 

The  Capitalistic  Class  use  what  they  need,  of  the 
surplus  the  workers  made,  but  still  have  a  large  amount 
left  that  they  must  invest. 

SO,  THEY  EMPLOY  THOSE  THAT  HAVE  BEEN 
DISPLACED  BY  LABOR-SAVING  MACHINERY, 
PAY  THEM  OUT  OF  THE  SURPLUS  TURNED  OUT 
BY  THEIR  MACHINE-WORKING  EMPLOYEES 
AND  SET  THEM  MAKING  MORE  MACHINERY  TO 
DISPLACE  MORE  OF  THE  SELF-EMPLOYING 
HAND  TOOL  WORKERS  OF  AMERICA. 

This  process  has  been  going  on,  since  the  beginning 
of  the  last  century,  at  a  rapid  rate.  It  has  taken  about 
one  hundred  years  to  transform  America  from  a  nation 
of  independent  self-employing  individual  workers  into 
a  nation  of  wage  slaves,  owning  no  means  of  wealth 
production  and  dependent  upon  the  Capitalist  Class 


31 

for  the  chance  to  work.  They  now  work  together  in 
large  industrial  establishments  in  which  the  work  is 
subdivided  till  one  man  does  but  a  small  part  of  the 
work  on  the  finished  product. 

They  collectively  produce  about  thirteen  times  as 
much  per  capita  as  the  workers  of  the  year  1800  did 
with  their  more  primitive  methods. 

Now  mark  carefully  these  facts  that  I  will  prove 
to  your  satisfaction  in  this  little  book. 

First,  the  working  class  produce  all  the  wealth. 

Second,  the  working  class  receive  only  an  existence, 
though  they  have  learned  how  to  produce  many  times 
as  much  wealth  as  their  ancestors. 

Third,  The  wealth  the  worker  produces,  but  does  not 
get  in  his  pay  envelope,  goes  to  the  Capitalist  Class 
in  PROFIT,  RENT  and  INTEREST. 

Fourth,  The  worker,  if  he  spends  his  entire  pay,  can 
only  buy  a  small  part  of  his  entire  product,  and,  as 
the  rich  man  cannot  really  consume  very  much  more 
than  the  working  man,  he  must  invest  the  balance  by 
employing  the  displaced  hand  workers  in  making  more 
labor-saving  (or  labor-displacing)  machinery.  If  he 
does  not  do  this  the  number  of  men  unemployed  cuts 
down  the  purchasing  power  of  the  people  till  the  fac- 
tories would  shut  down  for  want  of  a  market. 

Fifth,  THE  CAPITALIST  SYSTEM  MUST  KEEP 
EXPANDING  OR  FAIL.  Its  method  of  expansion  is 
to  displace  the  hand  worker  who  was  self-employed 
upon  his  own  tools  and  raw  material  by  a  wage  system 
under  which  a  few  men  own  all  the  means  of  life,  and 
the  workers  pay  them  all  that  is  produced  over  an  ex- 
istence for  the  privilege  of  using  the  tools. 

Sixth,  IF,  FOR  ANY  REASON,  THIS  EXPANSION 
OF  THE  CAPITALIST  SYSTEM  IS  CHECKED,  A 
PANIC  ENSUES,  AS  AN  UNSALABLE  SURPLUS 
PILES  UP  AND  THE  WORKERS  ARE  LAID  OFF 
AND  BEGIN  TO  STARVE.  THE  ENTIRE  BUSI- 
NESS WORLD  IS  IN  A  DEMORALIZED  CONDI- 
TION UNTIL  AN  EXPANSION  OF  THE  MARKET 
CAN  BE  MADE. 

THESE  DEPRESSIONS  DO  NOT  COME  AT 
REGULAR  PERIODS,  AS  MANY  PEOPLE  ASSERT, 
BUT  WHENEVER  FOR  ANY  REASON  THE  EX- 
PANSION OF  THE  SYSTEM  IS  CHECKED. 


32 

•  Eighth.  That  all  the  panics  up  to  and  including"  the 
one  of  1893  were  still  within  our  national  boundaries 
and  that  the  present  one  of  1907  is  the  final  world  panic 
caused  by  the  world  markets  becoming  clogged. 

Ninth,  This  panic  will  remain  chronic  until  the  Cap- 
italist System,  which  is  now  rattling  to  pieces,  is 
supplanted  by  the  system  of  National  Co-operation  in 
which  the  nation  conducts  the  work  of  production  for 
USE  instead  of  PROFIT. 

"Tenth,  Socialism  is  the  only  cure  for  the  unemployed 
problem  we  now  face.  From  now  on  there  will  be  fluct- 
uations up  and  down  in  the  number  of  unemployed, 
but  the  tendency  will  always  be  towards  a  greater  num- 
ber of  idle  men. 

Eleventh,  When  the  farmer  takes  his  crops  to  the 
capitalist  buyer,  he  also  has  a  falling  market,  as  the 
workers  of  the  industrial  cities  are  the  people  who  usu- 
ally consume  the  major  part  of  the  farm  products,  and 
about  one-third  of  them  are  out  of  work,  and  all  are 
living  on  shorter  rations  than  usual.  The  farmer  then 
buys  less  of  the  manufactured  goods,  and  the  market 
sags  away  more  and  more. 

In  the  next  few  years  this  question  must  be  settled 
by  the  workers  either  sinking  to  the  level  of  India  or 
rising  to  an  Industrial  Democracy  under  which  the 
workers  will  receive  FROM  society  an  equivalent  of 
what  they  render  TO  society,  and  the  reign  of  the  Cap- 
italist will  have  passed  just  as  the  reign  of  slave  holder 
and  serf  owner  passed  away. 

CHAPTER  II. 

THE  FIRST  PANIC,  1819  TO  1825 

To  give  the  reader  a  clearer  idea  of  the  Capitalistic 
Panic  we  will  look  into  the  industrial  history  of  Amer- 
ica and  find  the  cause  and  remedy  for  each  of  the  six 
industrial  depressions  that  have  assumed  any  magni- 
tude. 

The  first  of  these  occurred  in  1819.  A  period  of  great 
prosperity  for  the  Capitalist  Class  preceded  this  panic 
as  it  has  all  others  since. 

At  the  close  of  the  Napoleonic  wars,  which  had  oc- 
cupied the  European  States  for  some  years,  many  of. 
the  discharged  soldiers,  most  of  whom  were  craftsmen^- 


33 

came  to  America  and  furnished  the  American  Capitalist 
Class  the  much-needed  material  to  develop  the  system, 
viz. :  a  large  number  of  skilled  workers  who  were  with- 
out means  of  support  unless  the  Capitalist  employed 
them. 

From  1814  to  1819  commerce  was  brisk,  ships  were 
built  in  large  number,  new  mills  were  constructed,  and 
the  productive  power  of  the  worker  was  rapidly  ad- 
vanced. 

There  were  no  roads  of  any  kind  worth  mentioning 
over  the  country,  and  the  people  had  not  as  yet  builded 
the  system  of  canals  for  the  purpose  of  reaching  the 
inland  trade.  So,  thus  outside  of  what  trade  that  could 
be  reached  by  ships,  the  market  of  the  American  man- 
ufacturer was  very  limited,  so  presently  we  find  expan- 
sion checked.  The  factories  had  been  built  large  enough 
to  supply  all  the  market  would  take,  so  the  capitalist 
discharged  the  men  who  had  been  building  machinery 
and  enlarging  factories.  This,  by  taking  their  wages 
out  of  the  market,  lessened  the  demand  for  manufact- 
ured goods. 

In  1819  the  wheels  of  industry  commenced  to  clog 
with  an  unsalable  surplus,  the  merchants,  unable  to 
sell  the  stock  on  hand,  commenced  to  buy  more  care- 
fully, and  many  cancelled  orders  already  given  to  the 
manufacturer. 

The  manufacturer  now  could  not  meet  all  his  bills. 
The  banks  restricted  their  loans,  as  they  could  see  the 
storm  coming,  and  this  check  to  the  expansion  of  cap- 
italism threw  the  country  into  its  lirst  Capitalistic 
Panic. 

People  starved  for  the  first  time  in  history  because 
the.  product  of  their  labor  was  so  large  that  it  was 
bursting  the  storehouses.  The  United  States  Bank 
failed  and  the  financial  system  broke  down.  THIS 
PANIC  WAS  RELIEVED  BY  THE  BUILDING  OF 
PUBLIC  ROADS  AND  CANALS. 

The  Erie  Canal  was  fmished  in  1825,  and  connected 
the  Great  Lakes  with  the  Atlantic  Ocean  at  New  York 
City.  This  opened  a  new  market  for  the  manufacturer, 
and  the  panic  was  over  and  the  factories  were  rushing 
ahead  once  more. 

A  period  of  great  prosperity  (for  the  manufacturing 
and  trading  class)  that  lasted  till  1835  was  now  on. 


34 

All  the  presidents  of  the  United  States  have  been  in 
entire  sympathy  with  the  Capitalistic  Class,  and 
though  each  represented  usually  some  special  section 
of  the  class,  yet  all  did  their  best  to  relieve  the  situa- 
tion when  the  capitalistic  system  threatened  to  break 
down. 

CHAPTER  III. 

THE  SECOND  PANIC,  1837  TO  1845 

When  the  market  reached  by  the  canals  and  the 
wag-on  roads  had  been  developed,  the  expansion  of  the 
capitalistic  system  was  again  checked  and  the  great 
.  panic  of  1837  was  on. 

The  United  States  Bank  failed  as  well  as  many  of 
the  State  Banks. 

Eight  States  became  bankrupt. 

Money  nearly  disappeared  and  many  riots  occurred ; 
including  the  Anti-Catholic  riots  of  1844,  which  were 
not  so  much  on  account  of  the  religion  of  the  Irish 
immigrants  as  it  was  the  fact  that  there  were  not 
enough  jobs  for  the  native  Americans.  STEVEN- 
SON'S LOCOMOTIVE  SAVED  THE  CAPITALIST 
SYSTEM  THIS  TIME. 

The  building  of  railroads,  which  started  at  this 
period,  resulted  in  giving  emplovment  to  the  unem- 
ployed and  opened  a  wider  outlet  for  the  manufacturer. 

Capitalism  again  could  expand,  and  prosperity  was 
again  in  the  land. 

What  is  known  as  "prosperity"  is  a  time  when  most 
of  the  workers  are  employed  at  living  wa.cres  and  the 
capitalist  is  increasing  his  ownership  of  the  earth. 

Business  now  boomed  and  the  annexation  of  Texas 
and  the  war  with  Mexico,  which  added  a  great  deal  of 
new  territory  to  the  United  States,  together  with  the 
gold  discoveries  of  1849,  kept  things  prosperous. 

Any  who  wished  could  now  get  free  land,  and  a  lot 
of  new  land  was  settled. 

CHAPTER  IV. 

THIRD  INDUSTRIAL  DEPRESSION,  1857  TO  1861 

The  market  of  the  northern  manufacturer  was  ser- 
iously interfered  with  by  the  growing  ill  feeling  be- 
tween the  slave  States  and  the  northern  States. 


35 

In  1857  the  "Border  Wars"  of  Kansas  had  shown 
the  wiser  ones  that  the  question  of  chattel  slaves  or 
wage  slaves  would  have  to  be  settled  by  an  appeal  to 
arms.  This  caused  a  check  to  expansion  in  the  manu- 
facturing world. 

The  anti-north  feeling  in  the  slave  States  caused 
them  to  buy  all  they  could  in  England,  where  incident- 
ally the  prices  were  low,  but  a  protective  tariff  made 
about  equal. 

As  Capitalism  was  checked  in  its  expansion  the 
wheels  of  industry  again  became  clogged  and  anotl^er 
panic  was  on.  Banks  failed  as  usual  and  made  the 
situation  worse.  The  depression  lasted  till  the  Civil 
War  broke  out. 

This  war  kept  all  available  men  employed  killing  each 
other.  At  the  end  of  the  war  there  were  many  rich 
men  who  had  used  their  control  of  the  powers  at 
Washington  to  manipulate  the  currency,  bonds,  etc., 
as  well  as  army  contracts,  so  that  they  were  now  in 
good  shape  to  engage  in  manufacture  on  a  large  scale. 
The  disbanding  of  the  armies  gave  them  the  men  who 
needed  work,  so  they  started  to  repair  the  waste  caused 
bj  the  war. 

Large  industry  now  made  its  appearance.  Railroads 
were  now  built  in  excess  of  the  country's  needs.  Every 
business  was  on  the  boom,  but  the  market  of  the  South 
was  ruined  by  the  war  and  the  ^'Carpet  Bag"  govern- 
ment that  followed  it. 

CHAPTER  V. 

FOURTH  PERIOD  OF  DEPRESSION,  1873  TO  1879 

The  Franco-German  war  had  lessened  the  productive 
power  of  both  those  countries,  and  this  had  reduced 
the  shipment  of  merchandise  to  America.  During  the 
time  from  1870  to  1872  was  a  period  of  great  prosperity 
for  the  American  capitalist.  They  were  at  this  time  ex- 
pending their  profits  in  railroad  building. 

Railroads  were  run  from  "nowhere"  to  "no  place" 
and  were  not  paying  dividends  up  to  the  promises  of 
the  financial  sharks  of  Wall  Street,  so  the  people  lost 
confidence  in  them  as  an  investment  and  they  fell  in 
value.  This  stopped  railroad  building  and  threw 
thousands  out  of  empolyment. 


36 

Jay  Cook  was  the  large  banker  of  Wall  Street  at  that 
time  and  had  large  amounts  of  money  loaned  on  rail- 
road securities.  When  the  crash  came  it  caught  him 
and  he  dragged  many  of  the  country  banks  down  with 
him.  As  they  had  been  in  the  habit  of  sending  their 
spare  money  to  this  bank  in  New  York  for  loan  pur- 
poses you  can  easily  see  how  this  failure  involved  the 
whole  financial  system. 

A  period  of  depression  which  was  very  serious  for 
four  years  had  settled  over  the  country. 

The  withdrawal  of  the  Federal  troops  from  the  con- 
quered South  allowed  conditions  to  improve  there. 
When  the  Southern  people  got  rid  of  the  "Carpet  Bag" 
government  a  market  was  opened  in  the  South  by  the 
Southern  capitalist  buying  machinery  to  make  his 
former  chattel  slaves  profitable  as  wage  slaves.  The 
expansion  of  capitalism,  as  it  replaced  the  former  slave 
system  made  the  buying  of  manufactured  goods  better 
in  the  North.  Again  Capitalist  "Prosperity"  was  in 
the  land. 

It  was  during  this  period  that  the  "Corporation"  was 
invented. 

The  Corporation,  as  it  had  no  soul,  never  died,  and 
removed  the  cares  of  business  from  its  owners,  proved 
one  of  the  greatest  helps  to  the  expansion  of  the  Cap- 
italist system.  The  factories  grew  in  size,  more  mines 
were  opened,  new  and  larger  machinery  was  installed 
and  America  became  the  highest  developed  capitalistic 
nation  of  the  world,  with  almost  no  trade  abroad. 
America  had  a  very  small  army,  a  smaller  navy,  weak 
foreign  policy,  a  poor  system  of  foreign  consuls,  no 
world  influence,  no  colonies,  and  so  very  naturally  when 
expansion  reached  the  national  boundaries  it  was 
checked  and  a  serious  crisis  came  in  1893. 

CHAPTER  VI. 

FIFTH  INDUSTRIAL  DEPRESSION,  1893  TO  1897 

During  the  years  1893  to  1897  America  experienced 
the  most  serious  period  of  depression  in  her  history. 
Factories  were  running  short  time,  some  closed  alto- 
gether, and  many  workers  starved  to  death.  Soup 
houses  were  established  all  over  the  country  to  keep 


37 

absolute  starvation  from  overtaking  a  large  number 
of  the  working  class. 

-Then  we  noticed  the  government  as  usual  respond- 
ing to  the  needs  of  the  Capitalist  Class  by  adopting  a 
world  pohcy  of  expansion.  Troops  were  sent  to  China 
to  open  the  Oriental  m_arkets,  war  with  Spain  was 
fomented,  colonies  established  in  the  Philippines 
Hav/aii,  Porto  Rico,  etc.,  and  a  strong  and  aggressive 
foreign  policy  established. 

Consulates  w^ere  established  in  all  countries  where 
there  was  any  chance  of  getting  trade,  with  instruct- 
ions to  report  any  opportunity  to  sell  American  goods 
and  to  act  as  agents  of  the  Capitalist  Class  in  establish- 
ing a  world  market.  The  capitalist  system  of  the 
nation  again  expanding  and  the  panic  was  over. 

Again  prosperity  was  in  the  land  for  the  rich  man, 
but  the  worker  only  got  his  living  as  usual. 

WAGES  INCREASED  F'ROM  THAT  TIME  TO 
THIS  ABOUT  TEN  PER  CENT.,  BUT  THE  COST  OF 
THE  NECESSITIES  OF  LIFE  INCREASED  ABOUT 
FIFTY  PER  CENT.  (This  was  written  in  1907.)  The 
workers  now  had  steady  work,  but  had  to  work  harder 
to  get  a  living  than  before.  Most  of  them  were  in  debt 
while  steadily  working,  but  the  Capitalist  Class  was 
piling  up  property. 

The  Boer  War  also  increased  the  sale  of  American 
goods  abroad. 

The  Russo-Japanese  War  also  gave  the  capitalists  of 
this  country  a  large  market  in  the  Orient. 

The  trustification  of  industries  and  the  improvement 
of  American  machinery  made  it  possible  to  undersell 
all  competitors,  so  we  now  find  this  country  dominant 
in  the  world  market. 

All  the  European  countries  who  were  up  to  this  time 
Supplying  the  new  countries  with  manufactured  goods 
sank  into  a  chronic  state  of  business  depression. 

Our  principal  rivals  in  the  world  market,  England 
and  Germany,  have  been  undergoing  a  depression  for 
some  time  with  a  permanent  unemployed  army. 

AMERICA  AND  JAPAN  WERE  THE  LAST  TO 
GET  CAUGHT  IN  THIS  WORLD-WIDE  DEPRES- 
SION OF  1907. 


CHAPTER  VIL 

THE  SIXTH  AND  LAST  INDUSTRIAL  DEPRESSION 

OF  1907. 

China  is  now  developing  very  rapidly  as  an  industrial 
nation  with  wages  below  ten  cents  per  day,  working 
with  modern  machinery. 

They  can  produce  for  the  world  market  much 
cheaper  than  any  other  nation  in  the  world,  so  all  the 
rest  are  checked  in  their  expansion  and  are  failing. 

In  the  spring  of  1907  the  salesmen  of  the  different 
manufacturers  found  that  the  retail  trade  was  not 
buying  as  much  goods  as  usual,  although  the  manu- 
facturer had  made  up  the  goods,  so  of  course  had 
trouble  in  meeting  his  notes  at  the  bank.  A  financial 
stringency  resulted. 

A  panic  shook  Wall  Street,  on  March  14,  and  for 
several  weeks  the  large  financiers  dumped  millions  of 
money  into  the  loan  market  so  the  manufacturer  could 
renew  his  notes.  The  papers  talked  prosperity  and  the 
factories  ran  on  the  hopes  of  a  large  fall  trade.  In  the 
Fall  the  salesmen  found  the  buying  of  winter  goods 
smaller  than  the  spring  trade. 

Every  man  engaged  in  business  borrows  to  increase 
his  capital,  to  the  limit  of  safety,. so  when  the  winter 
trade  failed  to  come  up  to  expectations,  he  was  in  a 
bad  way.  All  banks,  seeing  the  storm  coming,  com- 
menced to  narrow  their  loans  and  reach  for  all  the 
cash  they  could  get. 

This  added  to  the  strain,  and  again  we  see  a  break- 
down of  the  financial  system  caused  by  the  industrial 
depression. 

The  government,  ever  watchful  of  the  capitalist  in- 
terests, dumped  millions  into  the  New  York  banks  to 
save  the  large  capitalists  from  failure.  We  do  not 
hear  of  them  sending  any  tons  of  coal  to  the  working- 
men  whose  families  were  freezing  thi^n'nter,  or  even 
loaning  any  money  to  the  working  class  that  have  pro- 
duced all  th  ^  wealth  there  is  in  the  country. 

But  we  must  not  complain  of  this,  as  the  Republican 
and  Democratic  Parties  do  not  represent  the  working 
class,  but  do  represent  the  Capitalist  Class  that  pays 
both  parties' car"  pai*?n  expenses. 


39 

There  is  only  one  party  in  America  that  stands  for 
the  working  class  interests,  and  that  is  the  Socialist 
Party.  They  are  a  dues-paying  p  )litical  party  con- 
trolled and  financed  by  working  men  and  women,  with 
a  program  that  embodies  the  hopes  and  aspirations  of 
the  working  class  put  into  an  organized  political  move- 
ment. 

Thfe  Socialist  Party  is  the  worldwide  political  move- 
ment for  the  liberty  of  the  wage  slave. 

We  will  deal  in  the  next  chapter  with  the  remedy 
for  panics. 

■i 

CHAPTER  VIII. 

CONCLUSIONS 

Let  u  sum  up  the  facts  we  have  found  by  studying 
the  history  of  industrial  development  and  the  panics 
that  have  occurred  during  its  growth.  We  come  to  the 
following  conclusions : 

First,  The  wages  of  the  working  class  are  held  down 
to  the  existence  point  by  the  competition  of  the  work- 
ers who  own  no  means  of  wealth  production. 

Second,  All  the  wealth  produced  by  the  workers 
above  their  cost  of  living  goes  to  the  Capitalist  Class  in 
the  shape  of  PROFIT,  RENT  and  INTEREST.. 

Third,  As  long  as  the  Capitalist  Class  can  invest  all 
their  surplus  profit  which  they  cannot  consume,  all  the 
workers  are  employed  and  the  capitalist  holds  title  to 
more  and  more  of  the  machinery  of  wealth  production. 

Fourth,  THE  SYSTEM  MUST  CONSTANTLY  EX- 
PAND IN  THE  SAME  RATIO  THAT  SURPLUS 
VALUE  IS  PRODUCED  BY  THE  WORKERS,  MINUS 
THAT  AMOUNT  ACTUALLY  CONSUMED  BY  THE 
IDLE  CAPITALIST  CLASS. 

Fifth,  When  anything  occurs  to  impede  the  expan- 
sion of  Capitalism  a  breakdown  occurs  with  many  fail- 
ures and  much  suffering. 

Sixth.  AI-T  EVIOUS  PANICS  WERE  RELIEVED 
BY  AN  OUTLET  BEING  FOUND  IN  AN  EXPAND- 
ED MARKET. 

Seventh,  Our  market  expanded  beyond  the  national 
boundaries  between  the  panics  of  1893  and  the  present 
one  of  1007,  and  we  have  now  glutted  the  world  market. 

Eighth,  Our  present  depression  will  be  permanent 


^ 


40 


Mi  slight  fluctuations  up  and  down,  but  mostly  down, 
Jid  our  unemployed  problem  will  last  as  long  as  the 
Capitalist  System  endures.  When  this  edition  goes  to 
press  the  ■  are  about  six  millions  wage  workers  out 
of  work,  with  twenty  millions  of  people  dependent  upo.: 
them  for  support,  and  many  starving. 

Ninth,  The  United  States  Government  may  find  a 
pretext  for  war  with  Japan  in  hopes  of  creating  a 
m.arket  in  the  Orient,  but,  even  if  Japan  is  conquered, 
it  will  not  do  much  good,  as  both  that  country  and 
China  are  rapidlv  growing  into  exporting  nations  with 
cheaper  labor,  that  is  as  skillful  as  any  in  the  world 
when  given  a  little  training,  and  they  are  now  even 
making  their  own  machinery,  and  have  stopped  buying 
from  the  United  States. 

Tenth,  THERE  IS  BUT  ONE  REMEDY  FOR  THE 
INDUSTRIAL  DEPRESSION  AND  IT  IS  ONE  THAT 
THE  REPUBLICAN,  DEMOCRATIC,  OR  NO  OTHER 
PARTY  FINANCED  BY  THE  CAPITALIST  CLASS 
WILL  EVER  APPLY.     THE  CURE  IS  SOCIALISM. 

The  nation  must  take  over  the  industries  and  run 
them  on  the  basis  of  national  co-operation,  giving  to 
the  workers  the  entire  product. 

Then  there  will  be  no  unsalable  surplus,  no  starving 
in  the  mJdst  of  plenty. 

We  will  com.m_ence  to  live  a  full  life.  We  now  only 
exist,  with  actual  starvation  an  ever-present  possibility. 

Let  us  establish  an  Industrial  Democracy,  where  the 
Home,  Life,  and  Liberty  of  ALL  the  people  v/ill  be 
safeguarded. 

Join  the  Socialist  Party  and  help  us  to  free  the  wage 
slave  and  make  America  a  free  country. 

THE  END. 


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